By on October 15, 2011

In many ways it was a strange scene. The president of Korea, speaking in a US factory that builds the replacement to a car that was once imported from Korea. The president of the United States, speaking in a factory that can only competitively build subcompact cars because of a government-ordered “innovative labor practices” that unionized workers were not able to ratify. In many ways, both President Obama and President Lee were visiting the graveyard of their ideals. Which is another way of saying, that this meeting symbolizes a new pragmatism.

American workers may not be getting paid what they once were, but they’re building cars at a profit. Korea may not be exporting as many cars to the US, but it’s putting the squeeze on Japan. Professor Kim Seung-jin of Hankuk University sums up the dynamic in the Korea Times, saying

There is no free lunch in the world… Korea should get into the U.S. market prior to Japan and China. The more we delay the less the advantage. You should know that the world is still living off the American market

This deal probably won’t boost US auto exports to Korea in the way Obama is hoping for, but it’s a reminder that US manufacturing is slowly becoming more competitive… and that our market remains an attractive place to do business. Free trade is necessarily a messy business for politicians, and protectionism might have kept Orion’s wages higher or Aveo production in Korea. But by embracing free trade, these two presidents could walk into Orion, live up to the downsides of free trade, and promise a stronger, more sustainable economic future.

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7 Comments on “Obama And Lee At Orion: Free Trade Sucks, But It Beats The Alternatives...”


  • avatar
    mikey

    As a Candian , I make a point of not offering my comments concerning U.S. policy or U.S. politics. Though I do find some of the partisan debate here at TTAC quite interesting.

    For the record I’m a retired GM Canada hourly worker. GM Canada is owned and controlled by the “New GM”. The “New GM” is 31 percent owned by the American taxpayer. Correct me if I’m wrong,but I think the UAW VEBA owns 15 percent. The Canadian and Ontario government jointly own about 9 percent.

    Its not hard to see who calls the shots. I mean really, who canned Red ink Rick, and Fritz? Oh yeah, and the UAW, and the former big three, settled without any work stoppage.

    President Obama considers us just another foreign country. I suppose he is correct. The Impala,Camaro, and Buick Regal are all imports.

    As a guy that depends on a GM Canada pension check, I find it all a little scary.

    Having said all that, I feel good for my former brothers and sisters at the Orion plant. Its been a tough go for all auto workers in the last few years. The concessions the UAW coughed up are starting to pay off.

    • 0 avatar
      Zackman

      Mikey, well said. I do not and will not make political comments either, but for a different reason.

      I don’t know if you saw the shout-out on “CC” last week, but you are formally invited to meet with several of us from here and over at Curbide Classic for dinner in Van Wert, Ohio next year, date to be determined! Car talk guaranteed!

  • avatar
    Patrickj

    Since there’s no barrier to importing to the U.S. except for pickup trucks and Cuban sugar, and “IMPORTED” is the most powerful word in marketing, there’s no downside for the U.S. in new free trade agreements.

    Upsides are probably modest, but if a few American companies get the idea that there are 6.5 billion potential customers outside the U.S, that’s a good thing.

    • 0 avatar
      STD1023

      PATRICKJ,
      Please inform yourself. The pickup truck tariff will be removed in 8 years -when Obama is out of office & on the big-money lecture circuit; Remember NAFTA and Clinton? Deja Vu?

      Let’s see… S.Korea gets unrestricted access to the most lucrative 13M/ yr car market in the world (you know all those high-margin trucks, SUVs,and luxo cars?) the US gets access to a 1M/yr econobox market.

      Great deal? HuH? Keep drinking the Obama-Killer KoolAID

      US autos -the politicians will find a way to get rid of them –like textiles, big steel, furniture, electronics, appliances…

  • avatar

    With all this talk about free trade and cars/trucks you’d think there would be a discussion of the “chicken tariff” as it applies to imported trucks. It may have helped the American companies at first, but now I’m sure they would all like to be able to import world trucks, like the Transit Connect, without going through all the crap Ford does to make them not trucks in the eyes of the law.

    • 0 avatar
      STD1023

      PW,

      The chicken tariff has saved hundreds of thousands of high-paying US auto jobs over the last 4 decades. The US auto industry dismantling, along with the evaporation of the US manufacturing sector, is blowing a giant hole in the tax base.
      It should make you happy taht Obama has just eliminated the chicken tariff for Korea -yeah it’s a time bomb that is going to go off in 8 years. Next time the big 3 goes down it may be for good…

  • avatar
    eldard

    Despite the dollar in the toilet, US goods are still expensive. Pasteurized honey (yuck!) at $5 a jar? No, thanks.


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